The Maine Focus

March 11, 2010 6:37 pm

In eight months, Maine will elect a new governor and Legislature. What should be their focus for bringing prosperity to this hardscrabble state in the midst of a historically deep recession? The 2010 Measures of Growth Report, issued annually by the Maine Economic Growth Council, includes a hit parade of familiar tunes. A voter can draw some conclusions about gubernatorial candidates by comparing the report with campaign statements; not everyone is singing from the same sheet music, it seems.

The report analyzes 20 areas relating to the state’s economy. The good news is that in 12 areas, Maine moved toward previous goals.

Personal income per capita, now at $36,457, improved. Maine’s national rank is now 30, up from 33. Still, three of our New England neighbors are earning significantly more. Connecticut topped the nation, with Massachusetts third and New Hampshire 10th.

What flies in the face of the doom and gloom scenarios that some candidates paint about the Maine business environment is the analysis of new-business starts. According to the report, “Entrepreneurial activity (businesses started by those who have not previously owned one) was higher than the U.S. [average] and [New England state average] in 2008.” Maine microbusinesses — those with five or fewer employees — grew by 3 percent from 2006-07, the report notes.

This last statistic should drive the next governor and Legislature to strengthen quality of place and creative economy initiatives.

Maine’s cost of doing business is still higher than the U.S. average, but it decreased in 2007. The answer, one gubernatorial candidate asserts, is to roll back state regulations. A better conclusion is to streamline and prioritize regulations; those that relate to public safety must remain, while those that burden business with documentation of dubious value should be reduced.

Areas where Maine is moving away from goals are investment in research and development, the number of people with college degrees, and the costs of energy and health care.

R&D expenditures were 1 percent of GDP in 2006, down from 1.2 percent. New England states averaged 4.9 percent, and the U.S. average was 2.6 percent. Despite the recession, the next governor should enthusiastically argue for funding R&D, even if it means bond funding.

The cost of health care in Maine is largely defined by national forces, as are the high costs of energy. But the next governor and Legislature must continue Gov. John Baldacci’s focus on economic opportunities that come with Maine’s location between alternative electricity sources and their demand in southern New England.

Maine lags New England and the nation in college degrees, with 34 percent holding degrees compared with 42.9 percent in New England and 35 percent in the U.S. The current governor’s push to remove barriers and diversify paths to postsecondary education and lower tuition costs must be continued.

No one is elected governor by noting what is right about Maine. But the Measures of Growth Report presents a more complex view of our state’s successes and challenges than some candidates would acknowledge. That complex view is needed if Maine is to move forward.